Journal of Education and Work, Vol. 15, No. 1, 2002

The Evolution of Education and TrainingStrategies in Singapore, Taiwan and S.Korea: a development model of skillformationD. ASHTON, F. GREEN, J. SUNG & D. JAMESCentre for Labour Market Studies, University of Leicester, 7–9 Salisbury Road,Leicester LE 1 7QR

ABSTRACT This paper challenges the conventional explanation of the role of the state inskill formation in the high performing Asian economies as advocated by World Bankeconomists. It does this through an examination of the institutions which supportedbene� cial strategic state intervention in the process of skill formation in Singapore, Taiwanand S. Korea. These enabled governments to produce a pace of skill formation so high thatit achieved within the space of one generation something that took the advanced industrialcountries three generations to achieve. Our research has identi� ed a set of governmentstrategies and associated institutional structures in the � eld of education and training inthese economies which, it is argued, played a crucial role in ensuring that economic growthcould proceed without employers experiencing severe skill shortages. We put forward a modelof the skill formation process which is dynamic in character, focussing on the relationshipbetween the state and the rapidly changing demand for skills during the process ofindustrialisation. This model allows us to examine some of the processes which are currentlysustaining as well as threatening existing forms of intervention in the area of skill formation,including those related to the � nancial crisis of the late 1990s.

Introduction

In her contribution to the debate which followed the publication of the World Bankreport on the ‘East Asian Miracle’ (World Bank, 1993), Alice Amsden proposed thatit was time to identify, with more precision, the institutions which supportedbene� cial strategic state interventions in the economy (Amsden, 1994). Such under-standing would, at the least, suggest how similar interventions might be made towork elsewhere. The idea was reiterated in 1995 by Huff (1995) who argued that the‘key questions’ now became those of how strategic intervention was managed insuch a way that these economies were able to grow so rapidly. Although thatparticular debate has been overtaken by concerns about the impact of globalizationand about the causes and consequences of the 1997/8 � nancial crisis, the potentiallypositive impact of the state remains broadly accepted, even by the World Bank itself

ISSN 1363-9080 print; 1469-9435 online/02/010005-26 Ó 2001 Taylor & Francis LtdDOI: 10.1080/13639080120106695

6 D. Ashton et al.

(World Bank, 1997). In particular, there has been a continued recognition from allsides that the state did make important contributions to economic growth throughits investment in skills development.

Amsden’s point was a salient one, especially if we apply it to the institutions forskill formation, the focus of this paper [1]. While econometric analyses havedisputed the puzzle of the precise magnitude of the contribution of education toeconomic growth (e.g. Young, 1995; Benhabib & Spiegel, 1994), just as large apuzzle is how the Tiger economies were able to secure an education and trainingsystem to match the economic miracle of long-term sustained high economicgrowth. Without some understanding of the matching transformation of the (effec-tively economic) institutions of the education and training system, the role of skillsin economic growth appears as that of a deus ex machina, which happened to permita switch towards a high-skills growth path (Rodrik, 1995). Moreover, an under-standing of how education and training have been linked (in the past) to the processof economic growth ought to facilitate a better understanding of prospects for futuregrowth in a post-crisis East Asia.

This paper takes up Amsden’s challenge with regard to the ways in which thegovernments of Singapore, S. Korea and Taiwan co-ordinated investments andpolicies in the � eld of education and training. These governments managed a paceof skill formation that it achieved within the space of one generation somethingwhich it took the advanced industrial countries three generations to achieve. Ourresearch has identi� ed a set of government strategies and associated institutionalstructures in the � eld of education and training in these economies which, it isargued, played a crucial role in ensuring that economic growth could proceedwithout employers experiencing severe skill shortages. We put forward a model ofthe skill formation process which is dynamic in character, focussing on the relation-ship between the state and the rapidly changing demand for skills during the processof industrialization. This model allows us to examine some of the processes whichare currently sustaining, as well as threatening, existing forms of intervention in thearea of skill formation, including those related to the � nancial crisis of the late1990s.

The paper is split into four parts. The � rst locates the discussion of skill formationwithin the context of the broader debate on state intervention. The second identi� esthe main industrialization strategies adopted by the three governments, strategieswhich generated distinctive education and training needs. The third part examineshow the governments were able to enhance and co-ordinate the supply of skills tomeet these distinctive skill needs, thereby generating the East Asian model of skillformation. The fourth part examines the changes which are impacting on this modelof skill formation and how these are being managed in different societies.

The Debate on the Asian Model

The debate over the Asian model has a long history. The World Bank report of 1993spoke of the ‘High Performing Asian Economies’ (HPAEs) and their distinctive‘market friendly’ approach to economic growth, referring to eight Asian economies;

Evolution of Education and Training Strategies 7

Hong Kong, Singapore, Taiwan, S. Korea, Thailand, Indonesia, Japan andMalaysia. As that report indicates there is no one model of HPAEs. While agreeingwith the World Bank Report that all eight countries got the basic economicdevelopment right (achievement of high and sustained growth in total factor produc-tivity, macroeconomic stability and the development of human resources), Perkins(1994) moves on to argue that the World Bank report fails to recognize the diversityin interventionist strategies adopted by governments. The strategies varied accordingto policies on price distortions, policies toward labour, to direct foreign investment(DFI) and, somewhat prophetically in the light of subsequent events, in the � nancialand banking systems. Perkins identi� es three distinct models with overlappingfeatures in common, distinguishing between the export-led state interventionistmodels of Japan, Korea and Taiwan; the free port service, commerce dominatedmodel of Singapore and Hong Kong and the model of those countries rich in naturalresources, Malaysia and Indonesia.

Amsden, in her discussion of the same report argues such diversities are at theheart of the Asian experience. Thus rather than forcing all eight countries into one‘market-friendly’ model of development it would have been more appropriate to‘begin to explore and analyze systematically which of East Asia’s supporting institu-tions has served investment, education and exports especially well with an eyetoward what must be done to modify these institutions to make them workelsewhere.’ (Amsden, 1994, p. 628). For her, the assumption that the governmentsgot the basics right through their market-friendly approach is � awed, largely becauseit detracts attention away from the diverse range of strategies adopted by govern-ments in their intervention both in the economy and in other areas of social life. Inparticular Amsden tends to focus on industrial policy as the area where the WorldBank report is particularly � awed.

Lall (1996) has also concentrated on the industrial policy interventions of theAsian Tigers, approaching the issue from a technological capabilities perspective. Hehas criticized the World Bank approach on theoretical grounds that selectiveinterventions across a range of policy were an essential component of the success ofthese economies. He argues that it is important to establish the fact that there aredegrees of industrial policy, with different levels and detail of selectivity in interven-tion and that the need for industrial policy can change as markets grow, reducing asmarkets grow more competent and sophisticated. Moreover, non-intervention alsocarries costs. Market failures can stunt industrialization if all that governments do is‘get prices right’, and then wait for markets to do the rest. ‘The lesson of the largerNIEs [New Industrial Economies] is precisely that these constraints of the marketcan be relaxed, and the industrialization process greatly compressed and dynamized,by appropriate interventions. Countries need not be satis� ed with the market-givenpace and content of industrial development but can use the market to enlarge theiropportunities.’ (Lall, 1996, p. 24).

The World Bank have taken on board some of these and the welter of othercriticisms their report generated [2]. In the World Development report of 1997which is devoted to the changing role the state, they argue that selective forms ofintervention can be justi� ed under certain circumstances. These include situations

8 D. Ashton et al.

where markets are underdeveloped, where the state can reduce co-ordinationproblems and plug gaps in information and otherwise encourage market develop-ment. They cite the industrial policy interventions of Japan, Korea and other EastAsian countries as examples of successful interventions but continue to warn againthe adoption of ill-thought-out activist industrial policies (World Bank, 1997, p. 7).They argue that in theory governments can act as brokers of information andfacilitators of mutual learning and collaboration, and thereby play a market enhanc-ing role in supporting industrial development, but only if three critical backgroundfactors are in place: � rst, companies and government of� cials need to be working onthe basis of mutual trust; second the initiatives must be kept open through the useof competitive market pressures, and third, the country’s strategy for industrialinvestment must be guided by its evolving comparative advantage. In practicethey see this form of industrial policy as having three components, investmentco-ordination, network thickening and picking winners. The � rst carrying fewer risksthan the other two. This argument represents a shift away from the 1993 position ofthe World Bank, even if the main thrust is still to warn of the dangers inherent inattempts to supersede the market.

Slower progress has been made in the debate over the role of education andtraining. New growth theory provided the means by which neo-classical theory couldescape from the diminishing returns scenario associated with conventional growththeory. Taking human capital and technology to be endogenous to the system, thehigher growth rates of the HPAEs could be explained (Lall, 1996, p. 4). Thisenabled the World Bank school to agree with their critics that investment in humanresources played a crucial role in the rapid growth of the HPAEs. However, theexplanation for the ways in which this investment was able to secure increasingreturn was still fairly rudimentary.

The higher income associated with the HPAEs enabled more resources to bemade available to education. High macroeconomic growth created the new jobswhich thereby raised the rate of return on education while increasing the demand forit. The demographic transition in these societies reduced the number of youngpeople and therefore enabled more resources to be devoted to each pupil. Finally theegalitarian distribution of income which was characteristic of these societies meantthat families had more disposable income to spend on education.

The central part of the World Bank’s analysis of the state’s role is the presumptionthat the social returns are higher than private returns for primary and secondaryeducation, but thereafter, at the university level the returns are almost fully capturedby the higher incomes of university graduates (World Bank, 1993, p. 198). Thisprovides the rationale for government investment in primary and secondary edu-cation but not higher education, an explanation which � tted the experience of theHPAEs which had invested in primary and secondary education, unlike some otherdeveloping economies where decisions had been made to invest in higher education,producing the well known problem of graduate unemployment (Dore, 1976). Thisinvestment in primary and secondary education then had substantial effects oneconomic growth in the early 1980s (Birdsall & Sabot, 1995). This theme wasdeveloped by Campos and Root (1996), who argued that good basic educational

Evolution of Education and Training Strategies 9

provision provided the skilled workers necessary for industrial growth by preventingthe emergence of bottlenecks in the supply of labour and the subsequent scarcitypremiums for skilled workers, both of which would have reduced the growth rate.

When it comes to training, while the World Bank report is positive about thebene� ts of training the main thrust of the report is that governments should leavethis to the market. A more detailed examination of the role of training is to be foundin the work of Middleton et al. (1993) who argue that while there are substantialbene� ts to be derived from investments in training (improving individual’s skills,facilitating the absorption of workers into the economy, increasing the rate ofmovement of workers into the more productive sectors of the economy, increasingentrepreneurial activity and facilitating workers adaptation to technological change)the contribution of these to economic growth are dif� cult to measure. This isbecause of the heterogeneity of the groups involved and the varied forms in whichtraining is delivered, although rates of return are ‘nearly always acceptably high’(Middleton et al., 1993, p. 46). The conclusion is that training is best left to theprivate sector but that there are a number of occasions where market failures mayarise and where externalities justify the use of government subsidies but not directintervention. National training authorities are seen as acceptable insofar as theyprovide a framework for dialogue between government, � rms and training institu-tions. This helps the market by facilitating the � ow of information and improving theef� ciency with which they operate.

There are three main problems with this account of the part played by education,training and human resource development generally in the economic growth of theHPAEs. First, the very speed of economic growth experienced by these economieshas meant that the types of skills demanded by employers over the last four decadeshas changed substantially. In the early phases of industrialization the main demandfrom employers was for relatively unskilled labor as labor intensive industries wereestablished to capitalize on their main source of comparative advantage, cheapdisciplined labor. All employers required here was a literate and disciplined laborforce which a system of public primary education was capable of supplying.

All this has now changed as these economies have moved in the direction of theproducing higher value-added goods and services. Employers in these productmarkets now depend on workers with high levels of general education and skills inteamworking and problem solving in addition to speci� c technical skills (ILO, 1998;Ashton, 1998). For such economies dependant on the production of higher value-added goods and services there is strong evidence to suggest that a large stock ofintermediate level skills is just as vital for them as literacy and industrial disciplinewas for employers in the early stages of the industrialization process (Streeck, 1989;Koike & Inoki, 1990). Under these circumstances there are important externalitiesattached to tertiary education as ‘New’ growth theory suggests (Lucas, 1993). Givenhow much and how rapidly the skills supply has had to be transformed, it is doubtfulwhether market forces could have generated suf� cient and timely incentives to dothe job. We argue below that the state played a key role in matching skills supply todemand.

A second and related point is that the explanation concentrates on the functions

10 D. Ashton et al.

of education in raising the level of general skills of the population. While the WorldBank group have now accepted some of points made by Amsden and Lall about theselectivity of government interventions in the � eld of industrial policy there has beenno attempt to examine the corresponding selectivity in their approach to investmentsin education and training. In the 1997 World Development Report educationreceives only a very cursory mention, (p. 52) reiterating the importance of investingin primary education. The importance of selectivity in government interventions inthe area of skill formation is a point made strongly by Lall in his analysis of theindustrial policies of the Asian Tigers. Each had a different strategy in terms of thetypes of industries it sought to establish as the basis of their comparative advantagein world markets. To support these specialized industries and technologies, it wasnecessary to have very focussed investments in tertiary and training provision toprovide the human infrastructure necessary to support them (Lall, 1996, pp.41–44).

The third problem is that identi� ed by Amsden and Huff, namely that we mustmove beyond general statements which recognize that investment in education andtraining has played an important part in the growth experienced by these economiesand, to paraphrase Amsden, begin to explore and analyze systematically which ofEast Asia’s supporting institutions has served to make this investment in educationand training so effective. In this context the key question is, how were the interven-tions in education and training managed so effectively?

Industrial Strategies and the Demand for Skills

Following Perkins (1994) we accept that there is a need to differentiate between thevarious HPAEs. However, unlike him we use the stage of economic developmentand the geo-political conditions which dominated international relations during theearly phase of industrialization as the basis for our categorization. The stage ofeconomic development enables us to separate those economies which have recentlyreached industrial maturity (ILO, 1998) from the second wave which followed intheir wake. The geo-political conditions were of crucial importance in determiningthe ways in which government sought to operationalize their industrial strategies andthese strategies in turn had signi� cant implications for the ways in which their ETsystems developed. This means making the following categorization: � rst theJapanese experience, where industrialization took place after the Meiji reforms in1868; second the � rst wave of the ‘Tiger’ economies, Singapore, Taiwan and S.Korea, which started the process in the 1960s in very different geo-political condi-tions [3]; and � nally the second wave Tiger economies of Indonesia, Malaysia andThailand.

The earlier experience of Japan in pioneering industrial policy is well documentedfollowing the work of Chalmers Johnson (1982). Success with government spon-sored industrialization meant that in spite of the defeat in World War Two, by the1950s the country already had strong technological capabilities and a well developededucation system. Following the war the problem facing the ruling elite was that ofrebuilding what had been a relatively advanced economy and � nding ways of

Evolution of Education and Training Strategies 11

breaking into world markets dominated by the western powers. The state, in theform of the Ministry of International Trade and Industry, provided a lead in the � eldof industrial policy, targeting markets and fostering the growth of indigenouscompanies which could subsequently compete effectively in world markets (John-son, 1982). During this period the education system merely responded to thedemands of the employers for more highly educated labor. The Education Depart-ment and the Ministry of Labor ran their respective organizations with littlereference to each other or to the MITI (Felstead et al., 1994). The EducationDepartment operated with a relatively high degree of autonomy in relation to otherdepartments, a situation that continues to the present day. Large employers took thelead in developing the skills of their workers, utilizing the system of lifetime learningand internal labor markets to generate high levels of skill formation (Koike & Inoki,1990; Koike 1995).

The situation facing three of the four � rst wave Tiger economies was different. InSingapore, Taiwan and S. Korea the ruling elites faced a situation in which theyhad to break into world markets with little in the way of a competitive advantageapart from an abundance of unskilled labor. Unlike Japan they had low levels ofeducation and very low levels of technological capability. However, perhaps the mostimportant feature of the geo-political environment was the fact that they were allfaced with continuing threats to their political independence (Castells, 1992).Singapore was expelled from the Malaysian Federation in 1965 amid doubts aboutits future viability as a separate political entity; S. Korea faced the threat fromthe communist North and Taiwan from the People’s Republic of China (PRC) onthe mainland. To guarantee their continued existence as separate political statesthey had to industrialize rapidly, they could not afford to wait for market forces todeliver the wealth they needed to secure their independence. Meanwhile, Japan wasdemonstrating how an industrial policy could speed up the process of economicgrowth. Thus, in these three � rst wave Tiger societies there was a relativelyunique situation. This resulted in pressure on the political elites to adopt Japanesetype industrial policies which would enable them to speed-up the process ofeconomic growth. However, if they were to maximize the bene� ts from theseindustrial and trade policies they had also to devise ways of upgrading the skills ofthe labor force and targeting them at the distinctive requirements of the companiesand industries they sought to develop. Otherwise their overall strategy would beundermined by skill shortages. It is this combination of circumstances which led thethree Tigers to develop innovative ways to manage the process of skill formation ata national level: what we refer to as the developmental model of skill formation(Ashton et al., 1999).

The model consists of three main components. First these states all assumedcentralized control over their education systems, in order to develop a strong senseof national unity or nation-building (Green, 1990). It was this function of theeducation system which drove initial public investment in education (McGinn et al.,1980; Green, 1990) and explains the highly centralized control over the curriculumand the emphasis placed on moral education which is a feature of the systems in allthree societies (Cummings, 1995). Once these controls were in place they could be

12 D. Ashton et al.

used to deliver the appropriate level and type of skill required for industry. Thesecond component was a clearly articulated trade and industry policy which was todrive the process of industrialization. The third component was the innovativemechanisms they devised to ensure that the skill requirements of the new industriesinformed the decisions made about the outputs of the education and trainingsystem.

The external conditions which gave rise to this distinctive model of skill formationcontrasted markedly with those facing the second wave of Tiger economies,Malaysia, Thailand and Indonesia. The political leaders of these other countries didnot face the same threats to their existence as independent political units. Moreover,as Perkins (1994) has highlighted, in the cases of Malaysia and Indonesia the initialgrowth of the economy was facilitated by the exploitation of their natural resources.Consequently the ruling elites in those societies did not face the same sense ofurgency to supersede market forces by pushing forward the process of industrializa-tion through the use of an industrial policy. Market forces could be relied upon tokick start the economy. The political rulers of these societies have not thereforeexperienced the same pressures to enhance the skills base of their labor force thatwere observed among the � rst wave Tiger economies and therefore the distinctivedevelopmental model of skill formation has not been adopted there.

There were a number of consequences which stemmed from these externalconditions facing the � rst wave Tigers. Each sought to initiate the process ofindustrial growth by taking advantage of their abundant supplies of low cost labor.This was to provide their competitive advantage in world markets as they developedtheir export orientated approach to growth. Once these proved successful and fullemployment was reached they each faced similar internal problems of increasingwage costs and external problems in the form of intensi� ed competition created bythe emergence of new competitors in their markets who could take advantage ofeven cheaper labor in their own economies (Verma et al., 1995). The response tothese and other pressures in all three economies was to move in the direction ofhigher value-added forms of production. Each developed a clear industrial policywhich spearheaded the drive toward this goal. However, the content of thosepolicies, namely the types of industries they sought to develop and the means bywhich this was done, the way in which capital was raised and production organized,varied between the countries. These differences had important implications for thetype of skills demanded by employers and subsequently for the ways in which theprocess of skill formation was structured in the three societies.

The Singapore government developed a reliance on Multi-National Corporations(MNCs); S. Korea developed its own indigenous form of industrial organization, theChaebols; while Taiwan used a combination of state sponsored organizations whichwere subsequently privatized and indigenous small and medium sized enterprises(SMEs) in the form of family businesses. The use of these different ways oforganizing the production process had important consequences for the process ofskill formation which in turn affected the form taken by the respective education andtraining systems. Each pioneered their own way of manipulating and shaping theeducation and training system to deliver the appropriate skills. The common result

Evolution of Education and Training Strategies 13

was that none of them experienced acute skill shortages, a remarkable achievementin an era of such enormous and rapid change.

Singapore sought to develop its advantages as an entrepot, building on its tradingadvantages and the oil and chemical industries which had been attracted there. Tothis were added the electronics and electrical industries, where both the capital,managerial expertise and technological capabilities were provided by multi-nationalcorporations. Because Singapore has only a small economy with a labor force of 1.7million (ILO, 1998) the range of industries it could support is limited. Thus whenthe government sought to move the economy in the direction of higher value-addedforms of goods and services it made sense to build on the initial, fairly narrowmanufacturing base and focus on electronics, precision engineering and chemicals.In the service sector, the government pushed for the development of banking,� nance and business services, where Singapore already had acquired a competitiveadvantage in the region (Huff, 1995).

This use of the MNCs to provide the capital, technology and managerial exper-tise, together with the existence of a small labor force, had important implicationsfor the subsequent development of the ET system. First the ET system had todeliver progressively higher level skills across a relatively narrow range of industries.This meant that it had to be focussed in terms of the types of skills developed in thesecondary and higher education system. Second, the use of MNCs to provide capitaland technological know-how meant that ways had to be found to ensure that thenew skills acquired were � rmly embedded in the local labor force. Third, given theconcern of MNCs with their own immediate training needs, there was always adanger that the long term skill needs of economy would be overlooked. MNCs couldnot be relied upon to move in the direction of forms of higher value-addedproduction on their own account. Fourth, the small size of the labour force meantmaximum use had to be made of all groups of workers. These were the distinctiveconditions which subsequently shaped the Singaporean ET system.

The South Koreans faced the problem of rebuilding their economy after theravages of war. After an initial period of import substitution the export industrieswere encouraged. Given the size of the labour force, just under 23 million (ILO,1998), the economy could support a much wider range of industries than Singapore,but nevertheless the government did target certain industries as the basis for theattack on world markets. The drive toward diversi� cation and higher value-addedindustries started in 1970 with the Heavy Chemical and Industrialization Plan whichtargeted steel, electronics, petrochemicals, shipbuilding, machinery and non-ferrousmetals (Koo & Kim, 1992). Further attempts were made in the 1990s to shiftindustry into technology intensive goods, including micro-electronics.

Capital was acquired from a number of sources. There was an initial in� ux offoreign aid from the US, but this dried up during the 1960s and the governmentused borrowing rather than foreign direct investment (Haggard & Cheng, 1987).Foreign investment was therefore tightly controlled and restricted to selected sectorsbecause the government feared that foreign domination of the economy in the formof MNCs would make it much more dif� cult to control the direction of growth.Control over the allocation of foreign funds and other credit made the state a major

14 D. Ashton et al.

player in investment decisions. One of the main bene� ciaries of this capital were theChaebol, Korean owned industrial conglomerates, which led the process of econ-omic development. In many respects these were more akin to Japanese corporationsthan the western model associated with the MNCs in Singapore. They offered theprospects of long term employment and extensive internal labor markets and rapidlycame to dominate both the product and the labor markets.

The Chaebol were used to deliver the push to diversify into heavy and chemicalindustries during the 1970s. They were also the means by which foreign technologyand know-how were incorporated into the Korean economy (Amsden, 1989). By the1980s they emerged as huge organizations which dominated the economy; in 1984the ten largest Chaebol accounted for over two thirds of all sales and half of allemployment (Amsden, 1989). Organizations which the state had fostered in itsattempt to control the direction of economic growth now had acquired monopolypowers. By the mid 1980s attempts were already being made by the state to reignthem in, but with limited success (Koo & Kim, 1992). These were subsequentlyintensi� ed as a result of the � nancial crisis, but the state was no longer in theposition it had been to control the direction of the economy.

The demands this created for the skill formation system were very different fromthose observed in Singapore. The sheer size of the economy meant that theeducation system had to cater for its outputs moving into a broader range ofindustries. Moreover, once the drive toward higher value-added forms of productionwas underway, the size of the Chaebol and the fact they could offer long-term, if notlife-time employment, meant that these organizations could provide the basis for asystem of workbased skill formation within the enterprise. Therefore in the laterphase of growth there was less pressure on the state to provide a strong output oftechnically trained personnel from the education system. However, the situationfacing the SMEs was different, in that they did rely more on the state to providethem with help in providing skilled workers, creating a schism within the labormarket between the skills rich employees of the Chaebols and the skills pooremployees of the SMEs (Lauder, 1999).

Like S. Korea, Taiwan had a large agricultural sector and this was initially usedto subsidize the development of industry. During the early phase, in the 1950s USaid provided 40% of capital formation (Haggard & Moon, 1990). Initially the stateplayed a major role in setting up companies and in establishing the new industriesof textiles and consumer electronics which utilized the cheap labor during the startof industrialization in the 1950s and 1960s. It retained control over key industriessuch as steel, public utilities and energy and used state enterprises to lead the wayin certain � elds such as petrochemicals and shipbuilding. These enterprises werealso used to branch into high risk areas, to provide inputs into downstreamindustries and as a means of signaling policy (Wade, 1990). Some of these enter-prises were then handed over to the private sector.

The move to diversify the economy started in the 1960s with attempts to promoteheavy industry and capital goods (Wade, 1990b) followed by the establishment ofmetal manufacturing, electrical machinery and precision engineering tools (Wade,1988). The second oil crisis and the loss of diplomatic recognition from the US

Evolution of Education and Training Strategies 15

provided the � nal impetus to push the government’s industrial policy in the direc-tion of industries creating more higher value-added goods and services (Pang,1992). In particular the government sought to establish the appropriate infrastruc-ture to generate new industries based on high levels of research and development,for example in the � elds of micro-electronics and information technology.

While the state was willing to lead the private sector in setting up new industriesthe economy as a whole was largely reliant on indigenous SMEs to provide thecapital and the organizational ability required for economic growth. In this respectthe dominance of SMEs is more reminiscent of Hong Kong and different from S.Korea. Foreign capital, while initially welcomed, was strictly controlled and directedby the government into sectors with high technology transfer potential. During the1980s and 1990s, as a result of � nancial liberalization foreign exchange controlswere relaxed as was screening of outward investment plans, although the � nancialcrisis of 1997/8 put a halt to this process.

This pattern of economic growth has meant that the education system has had todeliver young people with ever higher levels of educational achievement to a broadrange of industries. Unlike S. Korea, the state could not rely on the employers (withthe exception of the smaller group of state owned enterprises) to provide the skillsrequired by the various industries or to ensure the transfer of technological capa-bility. SMEs, especially family businesses, have no tradition of training nor theresources to create one. High labor turnover means that few employers could reapbene� ts from any substantive commitment of resources to training. Reliance on theSMEs as one of the main vehicles of economic growth thus meant that theTaiwanese state was faced with the problem of delivering a diverse set of technicalskills at ever increasing levels of sophistication. The state also had to � nd ways ofhelping indigenous � rms develop their technological capability.

Ensuring the Supply of Skills

All three governments, facing similar external conditions but with different strategiesto initiate and sustain the process of industrialization, faced a threefold problem.First that of upgrading the skills of their labor forces, second that of catering for thespeci� c requirements of their chosen form of industrial organization and � nally thatof containing the growing demand for academic rather than vocational education.The � rst task meant that they had to design institutions which would enable themto deliver the continuous upgrading of skills. If they had relied on the market toperform this function there was a real danger that skill shortages would have beencreated. Given the ways in which markets operate, employers would have had toexperience skill shortages on the basis of which they would adjust wages. Thesewould then provide the signals to parents about the types of skills their offspringshould acquire at school which in turn would motivate them to pressure the schoolsystem to provide the appropriate education. This is a slow process which tookgenerations to work through in the West. These political leaders did not have thatamount of time. There was an urgency about the need to industrialize. Moreover,they already had some control over the demand for skills through their trade and

16 D. Ashton et al.

industry policies and their industrialization strategy. Given the prior experience ofthe older industrial countries they also knew the types of skills which would bedemanded by the new industries they were seeking to establish. What they had to dowas establish the institutional mechanisms which would perform two related func-tions. First to ensure that the information about the skill requirements of the newindustries informed decisions about the provision of schools, colleges, trainingcenters and their curricula. Second, and just as important, to ensure that whendecisions were made about the provisions of these services the needs of the economytook precedence over those of other interested parties, for example, those of theeducation profession, the government ministries and the parents.

Thus, in all three societies we witness the emergence of mechanisms at the heartof government which perform the function of linking the output of the educationand training system to the skill demands of the current and future economy. Thesemechanisms are all centered around what may be termed super-ministries, minis-tries which have the dominant input in the decision-making processes acrossgovernment departments and especially in the area of education and training. Theytransmit the appropriate information and ensure that the needs of economic devel-opment take precedence over those of other groups and objectives.

In Singapore this took the form of the Ministry of Trade and Industry (MITI),whose agenda dominates that of other ministries. Its representatives chair thevarious Boards and Councils which form the decision making process in thosedepartments dealing with the provision of education and training. This ensures thatthe requirements of the governments industrial strategy take precedence over thoseof the vested interests of any one Ministry or Board.

The MTI is aided in its task of implementing the industrial strategy by theEconomic Development Board. It is the task of the Economic Development Board(EDB) to ensure that inward investment is forthcoming to provide capital for thenew industries. In performing this function the EDB is also cognizant of the humanresource requirements for those industries. The skill requirements of those indus-tries together with those of existing employers then shape the national skill require-ments. Other inputs into the formulation of national skill needs are derived from thepoliticians’ objectives concerning the type of industries the country wishes to attractin the future. For example, the government recently sought to increase the numberof companies operating in the � eld of research and development.[4] For this tohappen required an increase in the output of scientists and engineers. This require-ment is then fed into the equation.

All this information on national skill needs is then collated by the Council forProfessional and Technical Education (CPTE). On the supply side, the educationand training institutions produce data on their existing and projected outputs.Academics provide an analysis of national data which, together with the otherinputs, is used to identify what the education and training system can currentlydeliver. On the basis of this analysis judgements are then made about the future levelof output from the education and training institutions and whether it will benecessary to � ll any gaps by recruiting appropriately skilled labor from outside thecountry. This information is then used by the CPTE to establish speci� c targets for

Evolution of Education and Training Strategies 17

the various components of the education and training system, i.e., the Universities,Polytechnics, schools and the Institute for Technical Education. On the trainingfront, targets for on-the-job and work-based training and for employers’ investmentin training are set by the Singapore Productivity and Standards Board. It is theresponsibility of that Board to ensure that the skills of the labor force are upgradedto meet the demands of existing and new industries and that the supply of labor issuf� cient to meet existing and anticipated demand (Ashton & Sung, 1997).

When taken together, the work of the Council for Professional and TechnicalEducation and the Singapore Productivity and Standards Board provide sophisti-cated mechanisms to ensure that when the country de� nes its future skill needs,these are translated into speci� c targets. These targets are then used to determinethe output from the education system, from the technical education system, and asfar as possible, from employers’ own training activities. These mechanisms functionef� ciently because both politicians and civil servants share the same objectives whilethe technocrats operate through a corporate culture which facilitates rapid decision-making while minimizing bureaucratic procedures (Schein, 1996).

In S. Korea a similar mechanism was established in 1960 in the form of theEconomic Planning Board (EPB). It was called a Board in order to set it apart from(and above) other ministries, another super-ministry. The EPB had three majorfunctions: planning and formulating economic policy programs; co-ordinating econ-omic and other policies by ministries; and the evaluation of policy programs. For thelast 30 years, it has been the major in� uence on the formulation of educational andindustrial policies. Like the other countries, the priority accorded to industrial andeconomic development by successive governments has meant that deliberations ofthe Economic Planning Board took precedence over other issues on the agenda ofdifferent ministries.

In its planning role, the Economic Planning Board has had the support of theKorean Development Institute and works with the Ministry of Education, theMinistry of Labor and the Ministry of Science and Technology through its man-power agency. This enabled the education and training implications of the economicdevelopment strategy to be conveyed to the ministries responsible for implemen-tation. Where necessary this has been reinforced through the work of advisorycouncils, such as the Presidential Commission on Education Reform, more recentlylocated in the Blue House.

In Taiwan the co-ordination of economic and skill formation policies is under-taken by the powerful Council for Economic Planning and Development (CEPD).This works with the government in generating the industrial strategy and ensuresthat other ministries fall in line to meet the objectives of the economic plans. Thereare similarities with Singapore’s Ministry of Trade and Industry and its EconomicDevelopment Board. Taiwan’s CEPD has the responsibility for ensuring thatthe education and training system deliver appropriately trained personnel to meetthe requirements of the economy, as de� ned by the Industrial DevelopmentBoard. While the CEPD provides the overall strategy the Manpower DevelopmentCommittee, which is subsumed within the CEPD, carries out the more detailedplanning and direction of policy. This set-up ensures that the broad direction of

18 D. Ashton et al.

policy with regard to the supply of appropriately skilled personnel is delivered inpractice. There are, in addition, other mechanisms in Taiwan which assist in thesame function. One important institution is the National Youth Commission, whichmonitors the � ow of highly quali� ed manpower onto the labor market, in� uencingits education and training.

Through the use of these institutional mechanisms all three governments wereable to ensure that the general level of skill of those � owing into the labor force wasupgraded. In all three societies we witness a similar pattern of the systematicupgrading of educational provision and the management of educational demandthrough the introduction of distinctive forms of vocational and technical educationdesigned to ensure that the requisite technical and occupationally speci� c skills wereavailable to employers.

In Singapore the educational system has been through a series of reforms. TheGoh report (1979) saw the introduced of streaming as the means by which thedemand for education would be managed, with the schools providing general andacademic education and vocational institutes providing vocational education forthose who did not progress along the academic route. However, these initialattempts to incorporate vocational and technical education into the curriculum hadto be revised because of the low status attached to vocational education. Thegovernment did not always get it right. Further reforms were therefore introducedin 1990 to increase the minimum period of education to ten years and upgradetechnical education, establishing the Institute of Technical Education. Higher edu-cation has been expanded but access is strictly controlled with the state retaining aclear distinction between the technical and technological orientation of the polytech-nics and the academic orientation of the universities (Ashton & Sung, 1996).

In S. Korea, during the initial stages of growth in the 1960s, the governmentintroduced vocational high schools and limited access to higher education (Adams& Gottlieb, 1993) to provide the craftsmen required for the new labor-intensive lightindustries which formed the backbone of the export orientation push. This wasfollowed by further expansion of technical and scienti� c education. Again in the1970s vocational and technical education was expanded at the secondary level toprovide the semi-skilled and unskilled labor for the push toward heavy and chemicalindustries. This policy of expanding vocational education encountered strong resist-ance from parents and the government’s goal of two-thirds of pupils in vocationalhigh schools was never reached. Nevertheless it was successful in ensuring thatduring the push toward forms of higher value-added production, the educationalsystem did produce a signi� cant proportion of vocationally and technically trainedpersonnel for the growing Chaebol and the SMEs. However, during the 1980sgovernment control over the system came under increasing pressure and, althoughattempts were still made to increase the ratio of vocational to academic high schoolenrolment (Gill & Ihm, 1996), the government did open up the � ood gates touniversity entrance, but still sought to control its output by establishing newtechnological universities.

In Taiwan, the government has been more successful in upgrading the educa-tional levels of the labor force through the use of vocational schools. During the

Evolution of Education and Training Strategies 19

decade of the 1960s, while the period of compulsory education was extended to nineyears, the proportions in vocational schools increased from 40% in 1960 to 57% in1970 and by 1990 the proportion in vocational high schools had increased to 72%.This was achieved against a background of popular demand for academic education.However, as the economy was moving into higher value-added forms of productionthe government sought to increase the supply of those with more academicallyoriented, intellectual and problem solving skills, and by 1995 had reduced theproportion in vocational high schools to 70 with a further reduction to 60% plannedfor the year 2,000 (Chang, 1996, appendices). In the � eld of tertiary education thegovernment remained in control through its ‘narrow gate’ policy which restrictedaccess to higher education, but over time this was relaxed although strict control wasstill exercised over the proportion of science and engineering/technically educatedgraduates it produced. In 1984, some 47% of undergraduates, 70% of mastersstudents and 74% of Doctoral students were either scientists or engineers (CEPD,1986, p.103).

In this way, in all three societies the governments have used their knowledge offuture skill demands and their control over the education system to ensure anadequate supply of more highly skilled and vocationally trained labor to meet thedemands of employers as they moved into higher value-added forms of production.However, the task facing these governments was more complex than just increasingthe general stock of skills. As we have seen, each had speci� c skill requirementsassociated with both the type of industries they sought to develop and the form inwhich capital and labor was organized.

In Singapore the training problems facing the government centered aroundsupporting the Multi-National Corporations. First, they had to push the MNCs intohigher value-added forms of production. Second, with only a small labor force oneof the main problems they faced was how to ensure that all groups within the laborforce were provided with the appropriate skills, especially as many of the olderworkers had only primary education. The third problem they faced was how toensure that the technological capabilities brought in by the MNCs were transferredinto the indigenous population.

The � rst problem was tackled through the introduction of the Skills DevelopmentFund, a tax levied on low paid labor which thereby discouraged employers fromusing cheap labor. The Fund was used to upskill the workforce. However, theMNCs were reluctant to fund the upskilling of older workers; their representativessaw the lack of secondary education as the responsibility of the government. Theupskilling of older workers was tackled through a variety of programs deliveredthrough employers but funded through the Skills Development Board; these in-cluded the Basic Education for Skills Training program (1983), and the ModularSkills Training program (1986), for those in manufacturing, and the Core Skills forEffectiveness and Change (1987) for those in the service sector. In this way thegovernment sought to upgrade the skills of the most vulnerable workers and keepthem attractive to employers. In this task they had some success. For example, by1992 78% of the target group of 225,000 had experienced at least one module of theBasic Education for Skill Training program (ITE, 1993).

20 D. Ashton et al.

The government have also used a similar approach to upgrade the skills in thosealready employed in leading edge companies to prepare them for the next wave ofchallenges. Working with major companies they have introduced programs aimed atdeepening workers’ skills through structured on-the-job training. These OTJblueprints, modeled on the Japanese system of OTJ, have been developed withmajor employers in each of the industries targeted for growth and then cascadeddown through other employers in the same industry. Introduced in 1993, by 1997over 100,000 workers had been through the scheme (Ashton & Sung, 1997). Similartechniques are being used to improve workers’ problem solving abilities. Using theseand other programs the government has sought to supplement the training providedby MNCs to ensure that the national skill needs, as opposed to the company’s skillsneeds, are met.

The other way in which the government has sought to enhance worker skills isthrough the introduction of schemes designed to support the establishment ofoccupational labor markets. Employers in engineering and related industries re-quired workers trained in intermediate level skills but would not voluntarily under-write the costs of training. The government therefore established the NewApprenticeship Scheme in 1990 modeled on the German dual system, but modi� edto suit local conditions. More highly specialized skills were embedded in theworkforce through Joint Industrial Training Centers, developed in collaborationwith major MNCs in the 1970s. The Centers provided high level training inelectronics and precision engineering. As the demand shifted toward more knowl-edge and technology-intensive industries, their scope was extended to incorporateknowledge from other MNCs and foreign governments (Wong, 1993). Anotherdistinctive feature of the Singaporean system is the incorporation of labor into theskill formation process. Following initial suppression of the communists the govern-ment have successfully incorporated the Trade Unions into the machinery ofgovernment. The result is that the National Trades Union Congress plays asigni� cant role in both delivering skills training and encouraging employers to upskilltheir labor forces (Goh & Green, 1997).

In S. Korea, the problems facing the government as it sought to move theeconomy rapidly through the various stages of economic growth, were different. Inmany respects it was a larger problem, for not only was the population of 45 millionmuch larger it was also much poorer. In 1960 per capita incomes were only onethird of those in Singapore, ranking it among the world’s poorest countries. Initially,it was a question of providing the vocational and technical skills required for lightindustry and the forms of mass production spearheaded by the growing Chaebol.This was done through the use of vocational and technical schools but given thevalue in Korean society attached to academic education by parents, this has alwaysbeen a dif� cult task. In the 1960s the government therefore supplemented thissupply of skills from the vocational schools through the use of a public trainingsystem in the form of vocational training institutes (Ministry of Education, 1996), tocomplement the output from the vocational schools.

These measures were subsequently seen as insuf� cient, especially during the pushtoward the heavy and chemical industries, resulting in the government taking action

Evolution of Education and Training Strategies 21

through the Special Measures Law for Vocational Training to encourage companiesemploying over 500 employees (Lee, 1996) to increase the amount of training. Thiswas directed at the growing Chaebol and medium sized enterprises. A � ne or levywas imposed if they failed to train 15% of their workforce; a measure later extendedto smaller sized enterprises. This suggests that at this stage in their development itwas felt by the government that the Chaebol were not playing their full part indelivering the nation’s skill needs. However, after initial success the numbers trainedthrough the scheme fell dramatically in the mid 1980s, while the training itsupported remained at a relatively low level, that of the assistant craftsman.

Other attempts to introduce the equivalent of the German dual system at craftlevel also failed. This may have been in part because of problems of bureaucraticrigidity associated with the system (Jeong, 1995). However, during this phase theChaebol were increasingly dominating both the economy and the labor market. Asa result they were also internalizing the process of skill formation through the useof their internal labor markets and the provision of long term employment. Controlover the process of skill formation lay increasingly within the internal operationof the Chaebol. In these circumstances there would be less need for the establish-ment of occupational labor markets because the loci of skill formation was shiftingto the internal labor market. Providing the state education system delivers theappropriate level and quality of initial skill the Chaebol could deliver a signi� cantamount of upgrading of skills. However, the fact that the government has sinceintroduced new measures, through the 1999 Employment Insurance System (aimedat trying to ensure that the main employers provide the ‘new knowledge’ required forcompanies competing at the cutting edge of world markets), suggests that there arestill doubts about the ability of the Chaebol to provide for the nation’s skill needs asopposed to their own immediate needs (An Kyungduk, 1999). Nevertheless, theincreasing centrality of the Chaebol to the process of skill formation meant that therewas less pressure on the government to provide the range of programs available inSingapore.

The other features which serve to differentiate the Korean experience from that ofSingapore lie in the fact that Korea is a much larger country with a much broaderrange of industries has enabled the state to rely more heavily on the � ow of morehighly educated personnel from the education system to enhance the skill base. Also,the greater range of industries, some of which still make extensive use of relativelylower skilled labor, means that it has not experienced the problems of upgrading theskills of older workers. The other crucial area of difference is in the attitude of laborto skill formation. The suppression of organized labor, until relatively recently, hasleft a legacy of industrial con� ict as unions fought for basic rights, with the resultthat training has been accorded only a low priority.

In Taiwan the government faced the problem of providing the training infrastruc-ture for an economy largely reliant on SMEs. Although the government set up stateenterprises to help establish new industries and retain control over what it regardedas crucial parts of the economy, these were never allowed to grow in the manner ofthe Chaebol such that they could dominate the economy. It follows that internallabor markets did not play the same role in the process of skill formation as they did

22 D. Ashton et al.

in S. Korea. State enterprises were used to demonstrate the need for in-planttraining to supplement education provision in the early 1970s and as a source of skillformation in the larger enterprises. But the continued reliance on SMEs (Ashton etal., 1999) presented a problem because these companies did little training. Oneattempt to install a training levy system—the Vocational Training Fund Statute—ended in abject failure in 1974 after only two years, following substantial oppositionfrom many SMEs.

The main means of addressing this problem was to use the education system toprovide vocational and technical-trained personnel. As we have seen, the Taiwanesewere particularly successful in this respect, but it did mean shifting the costs oftraining onto the education system. However, even these measures, which resultedin over half the age cohort receiving technical or vocational education, were deemedinsuf� cient. Following the collapse of the training levy, the government providedtraining through a publicly funded system of training institutes, co-ordinated by theEmployment and Vocational Training Administration. A similar strategy to thatdeveloped by the Hong Kong government to meet the training needs of SMEs there(Ashton et al., 1999).

Given this reliance on small � rms, the government continues to play an active partin establishing conditions for the development of new high tech industries andproviding appropriately trained personnel. In the more recent plan, the CEPD isoverseeing the strategy to make Taiwan into the Asia Paci� c Regional OperationCenter. The government has taken the lead in developing the Research andDevelopment (r&d) capability of the economy; for example, in 1973 it set up theIndustrial Technical Research Institute to develop new technologies, which has ahistory of conducting large amounts of research in commercial areas which theprivate sector could not afford to fund. This has led to the establishment ofnumerous � rms, including TSMC, the country’s largest chip maker, as the elitescientists involved in R&D set up their own companies (Dolven, 1998). Meanwhilethe government supports these on-going developments through the creation ofscience parks and by ensuring that there is an emphasis on enhancing continuingeducation, innovation and quality in the delivery of education.

As in S. Korea, the military government initially suppressed trade unions andthese were only legalized relatively late in the process of industrialization. Unionshave had to struggle for their existence and in this context training has not been ontheir agenda.

While the institutional structures through which the three governments deliveredthe appropriate skills have been different, they have all been successful in managingthe education system and providing appropriate skills for the economy to sustainhigh levels of economic growth: thus, there has not been any one simple solution asto how the appropriate skills were to be delivered. Each government has had todevelop their own ways of containing the demand for academic education anddelivering training and skill enhancement. In short, the delivery of the appropriateskills has required considerable panache in managing the supply of labor. Themarket has been used but it has been complemented and, in some instances,superseded by the visible hand of management.

Evolution of Education and Training Strategies 23

Dynamics of the Skill Formation System

As we have indicated above, the development of this particular approach to themanagement of the skill formation process is a result of the combination of a seriesof factors; speci� c geo-political conditions, leading to the establishment of a strongstate with a high degree of autonomy in relation to capital and labor and a politicalelite with the motivation to push forward the process of industrial development. Theinstitutional structures we have identi� ed, the trade and industry policy, the super-ministries or linking institutions and a strong central control over the education andtraining system, are the ‘glue’ that holds the system together. This inevitably raisesthe question about the long term viability of this model of the skill formationprocess. To examine this issue we need to move on to a consideration of thepressures which are sustaining the system and those which are threatening it in thethree countries.

One of the main pressures which led to the development of this approach was thatof political insecurity threatening the sovereignty of these states. In the case of allthree these continue to exist. Singapore is still in a turbulent region in which itremains meaningful for the ruling elite to demand personal sacri� ces for the sake ofthe nation. Taiwan is still under threat from the People’s Republic of China and S.Korea continues to face threats from the North. However, while these politicalthreats remain these societies have now all developed very productive economies: afactor which provides some degree of security.

While these external threats can provide a force for internal unity and thereforecollaboration between the political elite and representatives of capital and labor,there are other external pressures which are pushing in the opposite direction.Attempts by the US and various international agencies such as the IMF, have soughtto reduce the internal regulation characteristic of these economies in an attempt toopen them up to foreign capital and investment. These are having a signi� cantimpact on both S. Korea and to a lesser extent Taiwan.

In S. Korea, international pressures to liberalize the economy contributed to thereduction of the power of the Economic Planning Board, and its subsequent mergerin 1994 with the Ministry of Finance, to create the Ministry of Finance andEconomy. These pressures were intensi� ed as a result of the Asian � nancial crisis of1997/8. Of all three Tigers, only Korea was heavily exposed to the reversal of foreigncapital � ows which triggered the crisis. However, the international pressures on thegovernment to de-regulate the economy were intensi� ed by the actions of the IMFwhich made � nancial support dependent on such actions (Briers, 1998). What thecrisis has done is to further undermine the ability of the state to control the directionof the economy through its trade and industry strategy and to weaken the super-ministry through which co-ordination of industrial strategy and education andtraining provision could be achieved. The � nancial crisis has had no direct impacton the process of skill formation, the education and training reforms planned beforethe crisis have gone through. The major problem identi� ed by the ILO report on thecrisis was that of introducing some form of social protection for those workers laidoff (ILO, 1998a). Although reduced in size it seems probable is that the internal

24 D. Ashton et al.

organization of the Chaebol will remain intact and that their internal labor marketswill remain the main foci of the skill formation process.

Taiwan and Singapore had not been large scale recipients of the capital in� owswhich were at the center of the crisis. Singapore as an international banking centerhad a strong regulatory infrastructure which meant that it was immune to the formsof cronyism which were so characteristic of Indonesia and, to a lesser extent, S.Korea. Neither Singapore nor Taiwan had such massive concentrations of capitallike the Chaebol which had become so dependent on foreign investment funds.Singapore was only indirectly affected, being at risk primarily because of investmentsin other parts of the region, especially Indonesia and Malaysia. As a result the� nancial crisis has had a minimal impact on the skill formation systems of the twocountries.

Prior to the � nancial crisis Taiwan had also been subject to pressure from the USand the international community to liberalize its economy. This pressure hadresulted in a reduction of the powers of the CEPD (Rau, 1996). However, the initialresponse of the Taiwanese government to the � nancial crisis was to re-evaluate someof its moves in the direction of liberalization. Moreover, although the governmentcontinued with its desire to be a regional � nancial center this has not prevented itfrom reconsidering its goals on foreign investment (Jia-dong Sheu, Deputy Gover-nor, Taiwan Central Bank, 1998). Thus Taiwan’s reaction to the crisis has been toput a temporary halt to aspects of the process of liberalization.

Perhaps the most signi� cant sources of change are those which come from withinthe systems. The most important are those which threaten the ability of the politicalelite to formulate and implement an effective trade and industry strategy. There area number of factors which operate here. First, the fact that these economies havenow caught up with the advanced industrial economies of Japan and the West meansthat it becomes ever more dif� cult to pick winners and therefore to identify the typesof skills required for the next generation of leading edge industries which the ETsystem will have to produce. This is affecting all three economies. However, politicalleaders in all three are convinced that they can identify the qualities which will berequired by those who work in leading edge companies. There is a strong belief thatfuture growth will come from the ability to be creative and innovative in whatevermarkets they operate. Hence there is a push in all three societies to reform the schoolcurriculum in an attempt to reduce the traditional reliance on rote learning andintroduce more creativity. At university level Taiwan has made signi� cant invest-ments in R&D and Singapore is currently doing the same, teaming up with Harvardand MIT to develop the two Singaporean universities as centers of R&D (Ashton etal., 1999).

A more serious threat to the ability of the government to implement a nationalindustrial policy is to be found in S. Korea, where the growth of the power of theChaebol means that it is very dif� cult for the government to continue to formulatean independent economic strategy. Attempts to limit their powers have been at bestonly partially effective. For example, the government sought to spread the ownershipof capital through privatizing state companies, only to � nd that it was the Chaebolwhich had the resources to acquire them. If the government cannot control these

Evolution of Education and Training Strategies 25

huge concentrations of capital, it cannot operate an independent industrial strategy.In the other two Tigers, this is not such a threat. In Singapore the state stillretains control of a signi� cant number of enterprises and none of the MNCs arepowerful enough to challenge the ability of the political leadership to implementindependent policies. In Taiwan the absence of large concentrations of capital inindependent � rms and the continued reliance on SMEs means that it retains itsability to shape the direction in which the economy moves. Perhaps the most seriousthreat now comes from the close geographical and cultural proximity of the People’sRepublic of China: prior to the crisis, Taiwanese businesses were increasingly takingthe route of direct investment just across the Sea. This exodus of capital is not yetcrucial, but taken to an extreme would, of course, threaten the ability of theKMT-dominated state to in� uence the usage of higher work skills within Taiwanitself.

Another threat comes from the political pressures generated by the wider processof democratization and the attempts by parents to make the educational systemmore responsive to their demands for academic education. In all three societies thisthreatens the ability of the politicians to control the delivery of skills. Thesepressures have had a more powerful impact in S. Korea than the other two societies.There the state has struggled to divert young people into vocational schools, withmuch less success than in Taiwan. In the � eld of higher education the governmenthas been obliged to open up higher education. Nearly 4 in 5 high school graduatesgo on immediately or eventually to higher education institutes, which may be farmore than the economy requires. In terms of its population share, tertiary enrol-ments in S. Korea rank number one in the world; yet, even before the � nancial crisis,S. Korea was still substantively poorer than other developed industrial nations. Thuswhile the state has been able to maintain a degree of control over the educationsystem in the past it is less able to do so now. In Singapore and Taiwan the situationis different. In Taiwan the government still retains strict control over schools anduniversity entrance and the appointment of university staff (Ashton et al., 1999). InSingapore the government is responding to similar pressures by increasing thegeneral academic content of the curriculum in the polytechnics and looking tocluster schools in an attempt to decentralize the system without necessarily losingcontrol (Gopinathan, 1999).

What this brief analysis suggests is that the model as it has operated in S. Koreais being undermined by both internal and external pressures on the system. Theinternal threats may be the stronger. The concentration of economic power createdby the Chaebol is making it dif� cult for the government to implement an effectivetrade and industry strategy while pressures to decentralize and democratize educa-tional provision are threatening the ability of the state to control the output from theeducation system. Under these conditions there is less of a role for a super-ministryas the government is obliged to rely more on the market to co-ordinate the demandand supply of education and training. In S. Korea this is precisely what hashappened, with the merging of the EPB with the Finance Ministry. In Singapore andTaiwan the approach remains largely intact as the constituent components of themodel continue to function reasonably effectively. Nevertheless, even here the extent

26 D. Ashton et al.

of control and the ability to design skill formation policies strategically are probablylessened by increasing democratization and the maturity of the economies.

Conclusion

We started with the aim of exploring how the state managed strategic interventionsin the � eld of education and training. We have demonstrated how the industrialpolicies pursued by the three Tigers enabled them to in� uence the direction ofeconomic growth and the type of industries developed in these economies. We havealso highlighted the institutional linking mechanisms, the super-ministries estab-lished by each of the governments, which ensured that decisions about educationand training provision re� ected the existing and future skill demands of the economyand how the implementation of those decisions was assured through strict controlover the delivery of education and training. We have also highlighted the ways inwhich these governments created the conditions under which they could manage therelationship between capital and labor. This enabled them to manage their humanresources and sustain growth by moving into higher value-added product markets inselected industries.

Knowledge of these mechanisms has enabled us to move beyond the conventionalWorld Bank analysis, to explain how governments were able to anticipate thedemand for skills and to tailor their education and training institutions to deliver theprecise skills required by employers. In so doing we have sought to answer Amsden’squestions about which institutions have served to make this investment in educationand training so ef� cient.

The analysis has also highlighted the conditions which threaten the continuanceof this type of strategic intervention, central to which is their ability to in� uence andshape the demand for skills through their trade and industry policies. If this fails, inthe sense that for any reason the government is no longer in a position to in� uencethe direction in which the economy was moving, then this would severely curtail itsability to plan ahead in terms of the types of skills the education and training systemcould deliver. Under these circumstances the best the government could do is to � ndways of ensuring that the ET system responded as speedily as possible to changesthat took place in the demand for skills in the labor market. The other centralcomponent of the model is the ability of the state to determine the output from theET system. Here if the state was to lose control over the education system, either thenature of the curriculum, or the � ow of young people through the system, then itsability to ensure an adequate response to future anticipated changes in the demandfor skills would also be severely curtailed. As we have seen, this is starting to happenin S. Korea.

Our analysis also reveals both the comparatively unusual and the contingentnature of the developmental skill formation model. Our interpretation of howpolicies have been driven should not be confused with the much more widely used,but now largely discredited, practice of old-fashioned manpower planning. Thelatter, essentially a western idea, comprised a pseudo-technical approach to forecast-ing detailed skill demands on the basis of past trends—often using input-output

Evolution of Education and Training Strategies 27

techniques. Rather the policies in the three Tiger economies have been driven by astrategic perception derived, not just from past or current skill demands, but alsofrom future expectations based on a reading of the global market. The stateperforms the function of ensuring the appropriate skills are in place to meet theobjectives of trade policy in a similar manner to the ways in which the MD of amodern corporation may take steps to ensure that the HR department puts the skillsin place to ensure that the corporation’s objectives are delivered. This form ofhuman resource management is about identifying the human resource implicationsof industrial growth over which the government has some degree of in� uence andcan thereby know, with some degree of certainty, what the skill demands are likelyto be. It is about using this knowledge to ensure that the various arms of governmentdeliver the appropriate outputs.

The contingency of the model rests on the particularity of the assumptionsdiscussed above: the conditions cannot be universalized, and may be underminedwithin the Tiger economies themselves. Critics of our earlier work, which began toexplore the development skill formation system in Singapore alongside other modelsof skill formation (Ashton & Green, 1996), appear to have mistaken our analyses fornormative prescriptions or, worse, misread them as presuming that state regulationis the universal key to success. This is de� nitely not the conclusion of our research.Rather, the developmental skill formation model was initiated by political elites inspeci� c historical conditions which enabled the state to achieve a high degree ofautonomy relative to the interests of both capital and labor. The high degree ofautonomy that we witnessed in S. Korea in the 1960s and 1970s and in Taiwan andSingapore throughout the period of time studied here is not inevitable or indeedeven common among nation states. Rather it is the product of speci� c historicalcircumstances.

This is not to say that the model is not therefore transferable. Rather, thecontingency implies that certain preconditions, some of which we have identi� ed,have to be in place before the ideas and practices can be transferred with any hopeof success. One such condition is the experience of external threats which canmobilize the political elites to seek to use the powers of the state to in� uence thedirection of economic growth. Thus we might expect similar approaches to themanagement of economic growth and skill formation to appear in countries whichhave experienced a strong external threat such as Kuwait and Cyprus. Where theappropriate conditions are in place the model offers the promise of speeding up theprocess of economic growth by making certain that the appropriate skills are in placeto prevent the emergence of labor shortages and skill bottlenecks.

The issue of contingency also raises further questions for research. Is the modelonly sustainable in smaller economies? Is it only a product of societies which havepolitical and cultural traditions which emphasize collective goals over those of theindividual? Can the components be maintained in societies with a larger and moresophisticated industrial base? Under these circumstances will market signals rep-resent a more ef� cient mechanism through which to co-ordinate the demand for andsupply of skills than the institutional mechanisms we have identi� ed? As yet one canbut speculate about the future of our three Tiger economies. While we have

28 D. Ashton et al.

indicated some of the problems they now face, on the positive side there remains ineach country a legacy of concern with the long-term direction of the economy. Toassume that, once catch-up is complete, future growth will proceed along a globaltrajectory that is determined outside national boundaries is an historical abstraction.The trick of future forecasting is to recognize the contradictions of the existing modeof economic growth, as well as the continuity of politico-economic processes whichhitherto have proved successful in their own terms. The motivation of policy makersto develop their education and training systems strategically as a lever for economicgrowth, and the mechanisms for doing so, remain stronger in the Tiger economiesthan in the West. As long as this remains true, they are likely to derive a measure ofdynamic national competitive advantage in the global economy.

Notes

[1] In addition to the sources acknowledged in the paper, our analysis is based on a largenumber of interviews with policy-makers, policy advisers, academics, and business andunion representatives in the Tiger economies, conducted between 1995 and 1998; seeAshton et al. (1999). The other members of that research team whose work has therebycontributed to this paper were Donna James and Johnny Sung.

[2] See for example: Fishlow et al., 1994; Kwon, 1994; Singh, 1994.[3] The situation in Hong Kong was different not least because it was ruled by a colonial elite

but also because of its function as an entreport for the southern regions of the PRC. Forthese and other reasons Hong Kong was able to industrialize without the need for a formalindustrial policy (see Ashton et al., 1999).

[4] Malaysia has adopted a variant of the Skills Development Fund pioneered by Singapore aspart of its skill formation system but Malaysia has not taken on the linking mechanismsfound in the � rst wave Tiger economies (Ashton et al., 1999).

References

AMSDEN, A.M. (1989) Asia’s Next Giant (Oxford, Oxford University Press).AMSDEN, A.M. (1994) Why isn’t the whole world experimenting with the East Asian model to

develop?: review of the East Asian miracle, World Development, 22(4), pp. 627–633.AN KYUNGDUK (1999) Human resource development and training in Korea. Ministry of Labour,

Training Policy Division. Paper prepared for the ILO Asian and Paci� c Tripartite Consul-tative Meeting on Human Resource Development and Training, Singapore, 30 June–2 July1999.

ASHTON, D. (1988) Skill formation: re-directing the research agenda, in: F. COFFIELD (Ed.)Learning at Work (Bristol, Policy Press/ESRC).

ASHTON, D. & GREEN, F. (1996) Education, Training and the Global Economy (Edward Elgar,Cheltenham).

ASHTON, D., GREEN, F., JAMES, D. & SUNG, J. (1999) Education and Training for Development inEast Asia: the political economy of skill formation in East Asian newly industrialised economies(London, Routledge).

ASHTON, D. & SUNG, J. (1997) Education, skill formation and economic development: theSingaporean approach, in: A.H. HALSEY, H. LAUDER, P. BROWN & A.S. WELLS (Eds)Education: culture, economy and society (New York, Oxford University Press).

BENHABIB, J. & SPIEGEL, M.M. (1994) The role of human capital in economic development.Evidence from aggregate cross-country data, Journal of Monetary Economics, 33, pp. 143–173.

Evolution of Education and Training Strategies 29

BIRDSALL, N. & SABOT, R. (1995) Virtuous Cycles: human capital growth and equity in East Asia(Washington, The World Bank).

BRIERS, D. (Ed.) (1998) Crash of ’97, Far Eastern Economic Review (Hong Kong, ReviewPublishing Company Limited).

CASTELLS, M. (1992) Four tigers with a dragon head: a comparative analysis of the state, economyand society in the Asian Paci� c Rim, in: R.P. APPELBAUM & J. HENDERSON (Eds) States andDevelopment in the Asian Paci� c Rim (Newbury Park, CA, Sage).

CAMPOS, J.E. & ROOT, H.J. (1996) The Key to the Asian Miracle: making shared growth credible(Washington, DC, The Brookings Institution).

COUNCIL FOR ECONOMIC PLANNING AND DEVELOPMENT (1986) Taiwan Chingchi Ch’ingshih (Tai-wan’s Economic Circumstances, Taipei, CEPD).

CHANG, P.-C. (1996) Manpower Planning in the R.O.C. on Taiwan’ Mimeo (Taipei, CEPD).DOLVEN, B. (1998) Taiwan’s Trump, Far Eastern Economic Review, August 6, pp. 12–15.DORE, R. (1976) The Diploma Disease (London, George Allen and Unwin).FELSTEAD, A., ASHTON, D., GREEN, F. & SUNG, J. (1994) Vocational Education and Training in the

Federal Republic of Germany, France, Japan, Singapore and the United States (LeicesterUniversity, Leicester, The Centre for Labour Market Studies).

FISHLOW, A., GWIN, C., HAGGARD, S., RODRICK, D. & WADE, R. (1994) Miracle or Design? Lessonsfrom the East Asian Experience (Washington, DC, Overseas Development Council).

GOH, E. & GREEN, F. (1997) Trade unions as agents for skill formation: the case of Singapore,International Journal of Training and Development, 1(4), pp. 230–241.

GOPINATHAN, S. (1999) Preparing for the Next Rung: Economic Restructuring and EducationalReform in Singapore, Journal of Education and Work, forthcoming.

GREEN, A. (1990) Education and State Formation: the rise of education systems in England, France andthe USA (London, Macmillan).

HAGGARD, S. & MOON, C.-I. (1990) Institutions, policy and economic growth: theory and aKorean case study, World Politics, 42(2), pp. 210–237.

HAGGARD, S. & CHENG, T.-J. (1987) State and foreign capital in the East Asian NICs, in: F.C.DEYO (Ed.) The Political Economy of the New Asian Industrialism (Ithaca and London,Cornell University Press).

HUFF, W.G. (1995) The developmental state, government, and Singapore’s economic develop-ment since 1960, World Development, 23(8), pp. 1421–1438.

INTERNATIONAL LABOUR OFFICE (1998) World Employment Report, 1998–99: employability in theglobal economy how training matters (Geneva, International Labour Of� ce).

INTERNATIONAL LABOUR OFFICE, (1998a) The Social Impact of the Asian Financial Crisis (Geneva,ILO Regional Of� ce for Asia and the Paci� c).

JEONG, J. (1995) The failure of recent state vocational training policies in Korea from acomparative perspective, British Journal of Industrial Relations, 33(2), pp. 237–252.

JOHNSON, C. (1982) MITI and the Japanese Miracle: the growth of industrial policy, 1925–75(Stanford, CA, Stanford University Press).

KOIKE, K. & INOKI, T. (1990) Skill Formation in Japan and Southeast Asia (Toyko, University ofTokyo Press).

KOIKE, K. (1995) The Economics of Work in Japan (Tokyo, LTCB International FoundationLibrary).

KOO, H. & KIM, E.M. (1992) The developmental state and capital accumulation in South Korea,in: R.P. APPELBAUM & J. HENDERSON (Eds) States and Development in the Asian Paci� c Rim(Thousand Oaks, CA, Sage).

KWON, J. (1994) The East Asia challenge to neoclassical orthodoxy, World Development, 22(4), pp.635–644.

LALL, S. (1996) Learning from the Asian Tigers: studies in technology and industrial policy (London,Macmillan).

LAUDER, H. (1999) Competitiveness and the problem of low skills equilibria: a comparativeanalysis Journal of Education and Work, forthcoming.

30 D. Ashton et al.

LUCAS, R.E. (1993) Making a miracle, Econometrica, 61(2).MCGINN, N.F, SNODGRASS, D.R., YUNG BONG, K., SHIN BOK, K. & QUEE-YOUNG, K. (1980)

Education and Development in Korea (Cambridge, MA and London, Harvard UniversityPress).

MIDDLETON, J., ZIDERMAN, A. & VAN ADAMS, A. (1993) Skills for Productivity (New York, OxfordUniversity Press).

MINISTRY OF EDUCATION/KOREAN EDUCATIONAL DEVELOPMENT INSTITUTE (1996) The KoreanEducation System: Background Report to the OECD (Seoul, Ministry of Education/KoreanEducational Development Institute).

PANG, C.-K. (1992) The State and Economic Transformation: the Taiwan case (New York andLondon, Garland Publishing).

PERKINS, D.H. (1994) There are at least three models of East Asian development, WorldDevelopment, 22, pp. 655–661.

RODRIK, D. (1995) Getting interventions right: how South Korea and Taiwan grew rich, EconomicPolicy, 20, pp. 53–108.

SCHEIN, H. (1996) Strategic Pragmatism (Singapore, Toppan Company (S) Pte. Ltd).SHEU, J.-D. (1998) quoted in Laura Tyson, Firm Rein on Forex Proves its Worth Financial Times

Survey, Taiwan, October 12, p. 2.SINGH, A. (1994) Openness and the market friendly approach to development: learning the right

lessons from development experience, World Development, 21(12), pp. 1811–1824.STREEK, W. (1989) Skills and the limits of neoliberalism: the enterprise of the future as a place

of learning, Work Employment and Society, 3(1), pp. 89–104.VERMA, A., KOCHAN, T.A. & LANDSBURY, R.D. (1995) Employment Relations in the Growing Asian

Economies (London, Routledge).WADE, R. (1988) State Intervention in ‘outward-looking’ development: neo-classical theory and

Taiwanese practice, in: G. WHITE (Ed.) Developmental States in East Asia (Houndmills andLondon, Macmillan Press).

WADE, R. (1990a) Governing the Market: economic theory and the role of government in East Asianindustrialization (Princeton, NJ, Princeton University Press).

WADE, R. (1990b) Industrial policy in East Asia: Does it lead or follow the market?, in: G.GEREFFI & D.L. WYMAN (Eds) Manufacturing Miracles: paths of industrialization in LatinAmerica and East Asia (Princeton, NJ, Princeton University Press).

WORLD BANK (1993) The East Asian Miracle: Economic Growth and Public Policy, A World BankPolicy Research Report (New York, Oxford University Press).

WORLD BANK (1997) World Development Report 1997: the state in a changing world (New York,Oxford University Press).